The city lies on the Vrbas river and is well known in the countries of the former Yugoslavia for being full of tree-lined avenues, boulevards, gardens, and parks.

The identity of the ban and the meadow in question remains uncertain, and popular etymology combines the modern words banja ('bath' or 'spa'), or bajna ('marvelous') and luka ('port').

[5] Due to the city's relatively high latitude and inland location, it snows in Banja Luka almost every year during the winter period.

There is substantial evidence of Roman presence in the region during the first few centuries A.D., including the fort "Kastel" (Latin: Castra) in the centre of the city.

Mediaeval fortresses in the vicinity of Banja Luka include Vrbas (1224), Župa Zemljanik (1287), Kotor Varoš (1323), Zvečaj (1404), and Bočac (1446).

In one document written by king Vladislav II on 6 February 1494 Juraj Mikulasić was mentioned as castellan of Banja Luka.

Among more important commissions were the Ferhadija and Arnaudija mosques during whose construction plumbing infrastructure was laid out, that served surrounding residential areas.

[12] This stimulated the economic and urban development of Banja Luka, which soon became one of the leading commercial and political centres in Bosnia.

[16] Despite its leading position in the region, Banja Luka as a city was not modernised until Austro-Hungarian occupation in the late 19th century.

Railroads, schools, factories, and infrastructure appeared, and were developed, which turned Banja Luka into a modern city.

During that time, the Banski dvor and its twin sister, the Administration building, the Serbian Orthodox Church of the Holy Trinity, a theatre and a museum were built, the Grammar School was renovated, the Teachers College enlarged, a city bridge was built and the park renovated.

During World War II, Banja Luka was occupied by Axis troops and was included into the Independent State of Croatia, a Nazi puppet-state led by Pavelić's Ustaše.

[17][18] On 7 February 1942, Ustaše paramilitaries, led by a Franciscan friar, Miroslav Filipović (aka Tomislav Filipović-Majstorović), killed more than 2,300 Serbs (among them 500 children) in Drakulić, Motike and Šargovac (a part of the Banja Luka municipality).

[21] A large building called Titanik in the centre of the town was razed to the ground, and the area was later turned into a central public square.

During this period a large Serb population moved to the city from the surrounding villages, and from more distant areas in Herzegovina.

On 28 February 1994, an incident occurred in which four Republika Srpska Air Force aircraft, which had violated Bosnia's no-fly zone and bombed a factory, were shot down southwest of Banja Luka by planes from the United States Air Force on behalf of NATO, marking the first active combat action in the alliance's history.

A number of big companies such as Telekom Srpske, Rafinerija ulja Modriča, Banjalučka Pivara and Vitaminka are all listed on the exchange and are traded regularly.

Investors, apart from those from Slovenia, Croatia and Serbia, now include a number of investment funds from the EU, and from Norway, the United States, Japan and China.

A number of financial services regulators, such as the Republika Srpska Securities Commission and the RS Banking Agency are headquartered in Banja Luka.

[citation needed] The following table gives a summary of total number of registered people employed in legal entities per their core activity (as of 2018):[34] The Museum of Republika Srpska inherited the Ethnographic Museum established in 1930,[35][36] and broadened its setting with collections of archeology, history, art history and nature.

The headquarters of the Archives of Republika Srpska is situated in the building known as Carska kuća or Imperial House, built around 1880.

[46] The local tennis tournament, "Memorijal Trive Vujića", has become professional and has been awarded ATP status in 2001, with the rank of a Challenger.

A wide range of bus services are available to most neighbouring and larger towns in Bosnia and Herzegovina, as well as to regional and European destinations such as Austria, Belgium, Croatia, Germany, France, Italy, Montenegro, The Netherlands, Serbia, Sweden, Switzerland, Hungary and Slovakia.

[53] Services operate to most northern Bosnian towns, and two modern air-conditioned 'Talgo' trains run to Sarajevo every day.

[54] The bus system faces several challenges, including the city government's debt to the private carriers[55] and the vehicles' advanced age.

[56] Banja Luka is twinned with the following cities:[57] Una-Sana  Central Bosnia Posavina  Herzegovina-Neretva Tuzla  West Herzegovina Zenica-Doboj  Sarajevo Bosnian Podrinje Canton 10